Biodiesel on the March; REG Reports Record Revenues for Q2
by Jim Lane (Biofuels Digest) …As is sometimes overlooked, the advanced biofuels pool in the US Renewable Fuel Standard is not only a qualifying pool for cellulosic biofuels – which have struggled to come to market in the projected volumes. It is also a qualifying pool for drop-in renewable diesel and for biodiesel.
For that reason, the National Biodiesel Board has rightly characterized biodiesel as the “here today advanced biofuel”.
So, let’s look at some data.
Price With a loss of the biodiesel tax credit and a fall in RIN prices, the average price per gallon (including RIN value) stood at $5.03 per gallon, for REG. That’s down from $5.91 per gallon last year at this time.
That’s a heft premium, compared to gasoline, but there’s the increased mileage with diesel to take into account.
… But the biodiesel pool itself is also expected to be up strongly, with mandated production under the Renewable Fuel Standard set for 1 billion gallons this year, up from 800 million gallons last year.
The future. The National Biodiesel Board is suggesting, and REG is supportive, that the industry can continue to grow its production 200-300 million gallons per year. Stretched out over 10 years, that would bring biodiesel’s contribution to the overall Renewable Fuel Standard to 3-4 billion gallons – and, because biodiesel gallons count for 1.5 ethanol-equivalent gallons (owing to the higher BTU value), that could account for 4.5 billion to 6 billion ethanol equivalent gallons.
Possible? Sure. It will depend a lot of the availability and price of feedstock. …(F)ully 80 percent of REG production comes from waste fats, oils and greases.
…“The vegoil facilities have a good middle refinery,” REG CEO Dan Oh tells the Digest. “What we do is put in a range of front end and back end technologies to handle other feedstocks and fine-tune the biodiesel we produce.”
… “RFS2 is working, and needs to defended vigorously,” Oh said. “If you think about it in aggregate, its created a food reserve in the country. It’s caused, for example, the drought to be a price problem here in the US, not a food scarcity problem. If we were starting at 1996 crop planting levels – with the kind of market that we had back then – we’d be looking at far more serious numbers in terms of food security.
“What are we getting? We are getting food security aspect we wanted, and more fuel security, and some wonderful environmental benefits. The problems of the drought are really serious, but they are temporal. If we didn’t have the demand, the problems would be far more severe.” READ MORE